Pubs 'will close' say landlords angry at tax rises

Pub landlords have warned the government of "dire consequences" if planned increases in business rates come into force in 2026. So why are so many pubs threatening to hike prices, lay off staff or shut altogether?

"It's the final nail in the coffin," said Phil Kiernan, who added he may have to close his pub in the Forest of Dean, Gloucestershire.

Landlord Luke Honeychurch, said the tax increase on his pub would leave him "unable to pay myself a wage at all".

But a Treasury spokesperson insisted the government is "protecting pubs, restaurants and cafes with the Budget's £4.3bn support package."

"I'm angry, I'm really really angry now," Luke Honeychurch told me.

We're standing in his beautiful Cotswolds stone pub, The Hog at Horsley. It is known for its well-kept local ales, from Stroud Brewery and good bar banter.

But the landlord now has an alter ego on social media, "The Grumpy Landlord".

Mr Honeychurch launched it after he discovered how much his business rates will rise.

"At the moment we pay around £100 a month," he explained.

"Next year, it will go up to £820 a month".

His first post, a self-confessed 'rant' about the Budget, notched up 800,000 clicks on his social media account. "Ironically, it did earn me a few quid," he laughed.

But the tax rises will cost him, personally.

"At the moment I'm already only taking half the minimum wage, around £6 an hour. But this is going to mean me earning nothing at all. That's just unsustainable."

Yet pubs were not lined up as targets in the Budget, like millionaires in rich homes or unscrupulous gambling firms. The Chancellor said she was "backing the great British pub".

And she has cut one of the elements of business rates, the so-called 'multiplier'.

When tax rates are worked out, the official rateable value is then adjusted by a 'multiplier'. It was 50% for pubs and hospitality firms. From 2026 it will fall to 40%.

"That's great, but it's not the whole story," Wesley Birch tells me.

Mr Birch has two pubs near Stroud, and a catering firm. We meet in The Ship Inn and chat by a roaring log fire.

"The problem is my rateable value has more than doubled," he explains. He is typical of publicans, who have seen the latest official valuations of their pubs soar.

This was expected, as it is based on the trading situation in 2024. The previous valuation was taken in 2021, at the height of Covid lockdowns, social distancing and pubs losing money hand over fist.

The government knew the valuations would increase the baseline for hospitality business rates. It has taken two steps to reduce the pain a little. Cutting the multiplier to 40% is one, and the other is to phase in the increase.

Treasury officials told me pubs, cafes and hotels will not have to pay the whole increase in the first year.

The spokesperson explained: "Most properties seeing increases will see them capped at 15% or less next year."

But the government accepts the business rates will, over three years, go up.

The pub trade is braced for big increases.

Allen Simpson, chief executive of UK Hospitality, told me pubs will, on average, see their business rates by 76%, around £12,000 for a typical small pub.

"And we will for sure see business losses, and closures, as a result."

In the Forest of Dean, Phil Kiernan has run the successful Farmer's Boy pub for years. The pies are legendary, he has been featured on television's The Hotel Inspector.

He says his business rates "will double, it's another £16,000 a year."

The pub is already reeling from increased energy bills, rising staff costs as the minimum wage goes up again and increased national insurance payments from last year's budget.

He has warned customers and staff that he may have to close the pub, if nothing changes before next April.

"We're at the top, I've nowhere to go for more cash," he explains.

"The Chancellor is absolutely ripping the soul out of the hospitality industry."